Folangsi (2499) H1 2024 earnings summary

Executive summary

• H1 revenue rose 12.7% YoY to RMB728.0m and net profit increased 292.8% to RMB42.2m, a period high.

• Growth reflected higher equipment and parts sales, improved gross margin and utilization; profit also benefited from no repeat of prior-year listing expenses.

• 77 service outlets across 48 cities managed over 50,000 equipment units at June 30, 2024.

Financial highlights

• Revenue rose to RMB728.0m from RMB646.2m; gross profit increased 18.4% to RMB219.6m.

• Profit before tax rose to RMB43.6m from RMB9.9m; net profit was RMB42.2m versus RMB10.7m, and EPS was RMB0.12 versus RMB0.03.

• Other income and gains increased to RMB9.5m from RMB3.0m, while other expenses fell to RMB1.0m from RMB18.8m; H1 2023 included RMB18.7m of listing expenses.

• Cost of sales rose 10.4% to RMB508.5m; selling and distribution expenses increased 7.6% to RMB45.8m and administrative expenses rose 12.1% to RMB86.7m.

• Finance costs increased 28.4% to RMB50.1m; operating cash flow was RMB239.6m versus RMB232.2m, and period-end cash was RMB169.4m versus RMB200.8m at year-end.

Outlook and guidance

• H2 priorities include strengthening online and offline services, improving equipment remanufacturing, expanding service offerings and developing overseas markets.

• 2024 plans target progress toward 1,000 offline outlets through organic growth, M&A, park business and partnerships.

• Plans include extending subscriptions to more intralogistics and industrial equipment categories and building overseas offline marketing networks in favorable markets.